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Midcaps, smallcaps in the limelight
Fri, 1 Apr 11:30 am

Indian stock market indices are trading flat at the moment. Stocks from the realty and power space are trading firm and those from the IT and banking space are trading weak.

The BSE-Sensex is up by 11 points while NSE-Nifty is trading 5 points below yesterday's closing. BSE Midcap and BSE Small cap indices are up by 1% and 1.2% respectively. The rupee is trading at 44.54 to the US dollar.

Auto stocks are trading mixed with TVS Motors and Hero Honda trading in the green, while Tata Motors and Bajaj Auto are trading weak. As per a leading financial daily, Bajaj Auto is all set to unveil the next generation Pulsars and Discovers. The company is likely to introduce the newer versions of its best sellers by the second half of the current fiscal. This move will replace some older models and some others may be discontinued. The new range is a part of the company's target to double its sales. The management opines that the market share will go up from the existing 27% to 40-50% post-launch of these new bikes. It may be noted that at present Pulsar and Discover account for 80% of the total sales of the auto company. Under the Pulsar brand Bajaj Auto sells four models and under the Discover brand, it sells two models. The company recently launched a new model under Discover - Discover 125. As per the management, Discover, is the world's second largest two-wheeler brand.

IT stocks are trading mixed with Moser Baer and CMC trading firm, while HCL Tech and Wipro are trading weak. As per a leading financial daily, for the top Indian technology firms, outsourcing contracts worth US$ 20 bn that are due to expire in the next 2 years are coming up for renewal. As per estimates, these contracts could add US$ 1.1 bn to Infosys' revenue over 2011-13 and US$ 1.8 bn to TCS' revenue over the same period. Wipro also stands to increase its topline by US$ 900 m. However, it may be noted that till recently IBM and others have had an edge in these contracts because of their hardware offerings.

It may be noted that Indian tech firms have won contracts worth US$ 20 bn against multinational rivals in the past four years. This is due to the fact that large deals are now being renewed as smaller contracts among several vendors. Indian players, on account of their maturity to handle complex projects, scale, a proven track record and the ability to drive down costs further, have been winning these contracts and gaining market share of 43% in the application development maintenance space.

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